FX.co ★ Japanese Yen Weakens on Soft PMI Data

The Japanese yen edged closer to the 150 mark against the US dollar on Monday, continuing its decline from the previous session. This downturn was influenced by disappointing business activity figures, which overshadowed the Bank of Japan's hawkish outlook. In March, Japan's private sector experienced a contraction in activity for the first time in five months, with the manufacturing sector facing a downturn for the ninth consecutive month, and services activity slipping into negative territory. Last week, the Bank of Japan maintained its policy rate at 0.5%. Board members adopted a cautious approach, deciding to evaluate the implications of global economic challenges, especially the potential consequences stemming from heightened US tariffs. Despite this, the central bank is anticipated to increase interest rates later this year due to ongoing inflationary pressures and rising wages. On the international front, the yen weakened against the US dollar, as President Donald Trump's April 2 deadline for implementing reciprocal tariffs continued to impact investor sentiment.